Orion Marine Limited, Taurus Oil and Gas Limited, owners of the Taurus Storage facility in Koko, Delta State have been accused of diverting 12,681,960 litres of Premium Motor Spirit (PMS) and replacing it with ocean water.
The case is currently before a Federal High Court in Lagos.
The case, originally scheduled for hearing, has been postponed to March 4, 2023. The vessel has already been detained for 36 days, which will extend to 46 days by the next hearing date.
Justice Justine Akintayo granted the adjournment following a plea from the defendants’ lawyers, who requested additional time to negotiate an out-of-court settlement with the plaintiff, NNPC Retail Limited. The defendants in the case include Orion Marine Limited, the bareboat charterer, and Taurus Oil and Gas Limited, owners of the Taurus Storage facility in Koko, Delta State.
Failed Settlement Talks
During the court session on February 18, the plaintiff’s lawyer, Mr. Mike Igbokwe SAN, informed the court that the defendants had failed to fulfill their promise to settle the matter out of court. According to him, the parties had met after the January 30 proceedings to discuss a possible resolution. However, when the plaintiff received no formal proposal from the defendants by the agreed deadline, Igbokwe had to file a counter affidavit.
The defendants’ lawyer, Mr. J.J. Usman SAN, acknowledged the communication lapse and requested more time, emphasizing the importance of resolving the matter amicably. Justice Aluko then adjourned the case for either a settlement report or further proceedings.
Allegations of Diversion
The case revolves around allegations that MT Ostria, its owners, and Taurus Storage acted negligently or breached their contract by discharging part of the consignment onto another tanker instead of delivering it to a tank farm at Koko Port, Delta State. The missing fuel was reportedly replaced with sea water while en route to Koko Federal Port.
The arrest order was issued following an “Admiralty Action in Rem” proceeding filed by Igbokwe, who sought the vessel’s detention and other reliefs for the loss of the PMS. According to the plaintiff’s 39-paragraph statement of claim, MT Ostria, a Liberian-registered ship, had been operating in Nigeria since March 25, 2022, under a five-year bareboat charter agreement with Orion Marine Ltd. Taurus Oil and Gas Ltd operates the Taurus Storage facility at Koko Port.
Contracts and Operations
MT Ostria was chartered by NNPC Shipping and Logistics to transport petroleum products from an offshore mother vessel, The Northern Light, to Taurus Storage. The plaintiff and Taurus Storage had signed a Throughput Agreement on March 18, 2022, which was later extended on July 1, 2023, for the handling and storage of petroleum products at the Koko facility.
On January 15, 2024, NNPC Trading Ltd entered a credit sale contract with the plaintiff for 20,347,750 litres of petrol. MT Ostria’s Master issued a bill of lading confirming the transportation of the fuel from The Northern Light to Taurus Storage.
However, when the vessel arrived at Koko Port on January 17, 2024, discrepancies were discovered. The defendants halted discharge operations on January 19 due to a significant variance in the cargo volume. Investigations revealed that part of the consignment had been illegally transferred to another vessel, Orion Atlantic, Orion Marine (also known as Garroch), without the required Nigerian Navy authorization.
Further Infractions
The statement of claim detailed how, after completing an initial ship-to-ship transfer on January 15, the crew of MT Ostria conducted an unauthorized transfer to Orion Atlantic, which falsely presented itself as a passenger vessel. Further investigations showed that Orion Atlantic had a history of maritime infractions, including identity theft and unauthorized name changes.
Worried that MT Ostria might leave Nigeria’s jurisdiction, Igbokwe filed for an Admiralty in Rem action, leading to the vessel’s arrest. Justice Aluko granted several orders, including:
Arresting and detaining MT Ostria until an acceptable bank guarantee was provided.
Directing the Nigerian Ports Authority to retain the vessel’s certificates.
Authorizing the Nigerian Navy to secure the vessel and prevent its escape.
Requiring the plaintiff to file an undertaking for potential indemnity.
Legal Developments
By the January 30, 2025 hearing date, NAIJAONPOINT reports that the defendants were legally represented, with NBA President Mazi Afam Osigwe SAN and Mr. J.J. Usman appearing for the second defendants. Igbokwe reported that the vessel had been arrested on January 17, 2025, and that the defendants had been served with legal notices.
Before the court session, Osigwe and Usman approached Igbokwe to discuss possible settlement terms. Osigwe suggested an undertaking instead of a bank guarantee for the vessel’s release, citing financial strain. Igbokwe maintained that any proposal would need the plaintiff’s approval.
Usman also filed a motion to set aside the arrest order but later withdrew an earlier related motion. Igbokwe objected to moving the new motion, arguing that it was not yet ripe for hearing under the Admiralty Jurisdiction Procedure Rules 2023. He also indicated plans to file a counter-affidavit against the motion.
Given these developments, the court adjourned the matter to February 18, 2025, for a settlement report or the hearing of the motion to set aside the arrest order.